The Impact of Rising Home Prices on Your Property Value

In recent years, headlines have been filled with news of rising home prices, but have you ever considered what that means for the value of your own home?

Over the past five years, home prices have skyrocketed, far outpacing the usual rate of increase. If you’ve been considering selling, this could translate into a larger-than-anticipated profit when you list your property. So, just how much has your home’s value increased? Let’s break it down.

The Surge of the Last 5 Years

Home prices typically rise by 2-5% annually, but between 2021 and 2022, we saw prices increase by double digits. At the height of this surge, national home prices soared by more than 20%. Why? The imbalance between the high demand from buyers and the limited inventory of available homes led to a dramatic price jump. While the market has since stabilized, you’re still benefiting from the substantial increases seen during this period.

In just a short amount of time, your home has likely gained more value than it typically would, meaning more wealth for you.

The map below, based on data from the Federal Housing Finance Agency (FHFA), shows that, nationally, home prices have risen nearly 60% over the last five years. The following breakdown provides insights by state:

If you’ve been hesitant to sell because of concerns about current home prices and mortgage rates, take a moment to consider how these significant gains might help bridge the affordability gap, potentially making it easier to buy your next home.

What About Long-Term Homeowners?

Have you owned your home for even longer? If so, your property value has likely increased even more. Not only have you seen the significant appreciation from the past five years, but you’ve also benefited from steady, long-term growth in home values. An experienced agent can help you calculate exactly how much this translates into for your situation.

How to Determine Your Home's True Value

While state-level percentage increases are helpful, you probably want a more specific understanding of your home’s current worth. The best way to get an accurate picture is to speak with a local real estate agent.

The map above offers general appreciation rates by state, but it doesn’t account for the specifics of your local market. Is inventory still tight where you live? Limited supply could push prices up even further. Have you made upgrades or renovations to your home that could increase its value? These are crucial details only a local expert can assess.

A qualified agent will understand your local market and can combine that knowledge with your home’s condition to give you the most accurate valuation. They have the data and expertise to provide a precise estimate of your home’s value in today’s market.

Conclusion

Home values have increased significantly — perhaps more than you expected. Want to find out how much your home is worth in today’s market? Let’s connect and get you the answers you need. If you prefer, you can start with our free home equity evaluation tool: How Equity is in Your Home?

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.